Will virtual school become reality in D-300?

Proposal raises questions about financial impact, investigation of company

Published: Sunday, April 7, 2013 5:30 a.m. CST

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CARPENTERSVILLE – District 300’s finances could be squeezed even tighter if a proposed virtual online charter school that would poach students and tax dollars from the district is allowed to open.

Formed in February, the nonprofit Virtual Learning Solutions is petitioning to open the Illinois Virtual Charter School at Fox River Valley.

It wants to enroll students from 18 area school districts, including Carpentersville-based District 300.

Local districts’ funds – estimated at up to $8,000 a student – would be siphoned off for each pupil who leaves their brick-and-mortar buildings to attend the virtual school.

District 300’s Chief Financial Officer Susan Harkin said the proposed online charter could take anywhere between $535,430 to $906,780 annually in district revenue from a budget already constrained by state budget cuts and a new multiyear teacher contract.

“We can’t take this, especially when the taxpayers are crying for us to find a way to cut costs and now we have to shift $500,000 out of the district’s budget minimally,” Harkin said. “We are going to have to figure out how to plug that hole.”

Those 18 districts, statewide government watchdogs and education associations fear that the proposed online charter school would divert precious tax dollars from public schools to a for-profit, out-of-state company with a shaky track record of managing similar schools in more than 20 states.

While Virtual Learning Solutions would govern the charter school, it has said that day-to-day administrative and curriculum responsibilities will be handled by K12 Inc.

The Virginia for-profit company is under investigation by the Florida Department of Education. The National Collegiate Athletic Association will no longer accept certain credits offered by K12. And in Tennessee, students enrolled in K12’s online program scored the lowest in the state’s assessment system.

Officials for K12 and Virtual Learning Solutions did not respond to repeated requests for comment, and local districts said they provided few answers during public hearings held in March on the proposal.

However, late last week, Virtual Learning Solutions provided a nearly 1,100-page packet to superintendents of those 18 districts that purported to provide answers. It sent the same packet to Shaw Media, which owns the Northwest Herald, on Friday.

The numerous concerns and questions about the proposal and K12 has prompted the Illinois Education Association, which advocates for nearly 133,000 public education employees, contacting teachers throughout the area.

“The people in schools today are there because they care about the kids,” IEA spokesman Charlie McBarron said. “If you are a for-profit enterprise, your focus is profit and what’s good for the shareholders.”

K12’s performance

K12 Inc. was founded in 2000 by former banker Ronald J. Packard as an answer to “a call voiced by a growing number of parents whose children’s needs were not being met by traditional education models,” according to the K12 website. It promises engaging, individualized education.

Virtual Learning Solutions and K12 have said all teachers would be credentialed and live in Illinois, and that students would spend at least six hours a day on coursework. Every student would have a learning coach, a parent or guardian who would keep track of attendance and progress.

But national media and academic researchers have routinely scrutinized K12 as putting shareholders first while producing subpar student achievement and high attrition rates using taxpayer dollars.

K12 had revenues of $708.4 million in its 2012 fiscal year, and expenses of $679.4 million, according to the K12 annual report and filings to the Securities and Exchange Commission. The previous year, revenue was at $522.4 million and expenses were $498.2 million.

K12 students have not performed as well: A 2012 study from the National Education Policy Center at the University of Colorado found that 27.7 percent of K12’s schools made adequately yearly progress in 2010-11, versus 52 percent of public schools.

AYP measures whether schools are meeting state education standards. The metric has been criticized for its unreliability, but K12’s inferior academic results warrant further attention rather than excuses, NEPC researchers noted in their study.

The Chicago Virtual Charter School – started in 2008 with students from Chicago Public Schools – is among the 73 percent of K12 Inc.’s schools that did not meet AYP.

The state’s meet and exceed average has been 81 percent, 82 percent and 82 percent from 2010 to 2012, respectively. In that time, the Chicago virtual charter had 71 percent, 77 percent and 79 percent meet or exceed state standards, according to the Illinois Interactive Report Card.

McBarron, the IEA spokesman, said a number of students have left K12’s 36 online charter schools after only a couple of years. In its own 2013 academic report, K12 reported more than half of parents with a child in a K12-managed school planned to keep their child there for fewer than two years.

The Florida Department of Education is investigating K12 for reportedly using uncertified teachers and falsifying records to show that teachers had taught students when they had not. A draft of that investigation has been sent to K12 and Seminole County Schools for review and response by April 11, spokeswoman Cheryl Etters said.

As of July 2012, the NCAA no longer accepts Aventa Learning credits, a K12 online unit, spokesman Chris Radford said in an email. K12 is an in “extended evaluation” to determine whether those courses meet “the academic requirements for NCAA cleared status,” according to Radford’s email.

And in Tennessee, K12’s students tested in the bottom 11 percent of Tennessee’s students and scored 1 out of 5 in annual growth assessments.

Kelli Gauthier, spokeswoman for the Tennessee Department of Education Commissioner, said scores for students who attended the Tennessee Virtual Academy, K12’s online charter, “were the lowest in the state” in the company’s first academic year.

“It’s not specifically that we think virtual schools are bad, but it is a reflection of how these schools are performing – at a low level,” she said.

Gauthier said the Legislature could impose restrictions on the virtual school, possibly requiring it to achieve a certain threshold of student growth before being allowed to increase enrollment.

“At the end of day, our kids have to be learning more every year,” Gauthier said.

Shrinking resources

Beyond the concerns about academics and accountability, the potential loss of significant state funding is distressing, officials say.

The Center for Tax and Budget Accountability and the Illinois Education Association argue that the combined millions the 18 local school districts could lose would not be better spent if diverted to the proposed charter school.

Lawmakers consistently have underfunded the state’s foundation level, set at $6,119 a student since 2010 – resulting in almost $1 billion in funding cuts to public schools.

“Charter schools take money out of the public school system that is woefully underfunded to fund alternative schools that don’t have a proven track record of academic success,” Martire said.

Harkin estimated the potential financial hit District 300 after she and other administrators met and questioned representatives from the proposed charter during its public hearing last month.

District 300 board members are scheduled to vote on the proposal Monday.

Virtual Learning Solutions has said it plans to appeal denials to the Illinois Charter School Commission.

The district likely would lose 62 students in the first year of virtual school at a price tag of $535,430, Harkin said. The district’s revenue loss escalates to near $1 million if the district ultimately loses 105 students.

But the revenue loss would be difficult to offset, Harkin said, since students scattered throughout the district’s 26 schools would be leaving for the charter. That prevents the district from shedding big-ticket expenses, such as a teacher salary or a class, to compensate for the revenue loss, Harkin said.

“Anytime we lose a dollar, it gets harder on school districts,” she said.

• Shaw Media Projects Editor Kate Schott contributed to this report.

The proposed Illinois Virtual Charter School at Fox River Valley would draw students from the following school districts